By Agnieszka Flak
JOHANNESBURG (Reuters) - South African diversified miner African Rainbow Minerals (ARM) said on Monday first-half profit more than trebled, boosted by a rise in commodity prices and higher output from its projects.
ARM, which has interests in nickel, coal, iron ore, platinum, chrome and manganese, said the outlook for its commodities was positive due to demand from China and global supply constraints, although the strong rand was a concern.
Shares in the company were down 0.67 percent at 209.58 rand by 1240 GMT, compared with a 0.27 rise in Johannesburg's Top-40 index of blue chips.
Analysts said the market had largely factored in the spike in earnings after guidance given earlier this month and saw the share drop as part of a larger sell-off of South African stocks.
"On balance, the results are acceptable, good ... they are embarking on some very ambitious projects," said Sasha Naryshkine, an analyst at Vestact.
The company is pursuing an aggressive growth strategy to benefit from higher prices and rising demand.
It is expanding its Khumani iron ore mine to produce an annual 16 million tonnes by the 2013 financial year, out of which 14 million would be destined for exports.
The company said its Konkola North copper project in Zambia, which the company is developing together with Brazil's Vale, was also on track, with estimated production of 45,000 tonnes of copper per year.
The copper concentrator will be commissioned in December 2012, with full production targeted for the 2015 financial year.
ARM said there was potential to increase output at the mine to an annual 100,000 tonnes.
"We plan to spend about a billion dollars with our partner Vale in Zambia over the next six or seven years," said Chairman Patrice Motsepe.
The expansion of its Nkomati nickel project was on track, with full production envisaged in the 2013 financial year.
PROFIT SURGE
ARM said first-half headline earnings per share, the main profit gauge in South Africa which excludes certain one-time items, rose to 734 cents compared with 214 cents.
The company said it had managed to reduce costs at some of its operations. Its ferrous unit, which includes iron ore, chrome and manganese, contributed most to the rise in earnings.
Chrome ore sales volumes from Assmang, in which ARM has a 50 percent stake, more than doubled, while production of copper and manganese rose 10 percent and 43 percent, respectively.
Sales for the six months rose to 6.7 billion rand from 4.2 billion in the comparable period. The positive impact from a rise in commodity prices was partially offset by the stronger rand.
Motsepe said Chief Executive Andre Wilkens would step down, but will continue within the company as an executive director. he did not say who would replace Wilkens.
Shares in the company are up 0.43 percent so far this year, in line with a 0.57 percent rise in Johannesburg's Top-40 index of blue-chips.
ARM, which has interests in nickel, coal, iron ore, platinum, chrome and manganese, said the outlook for its commodities was positive due to demand from China and global supply constraints, although the strong rand was a concern.
Shares in the company were down 0.67 percent at 209.58 rand by 1240 GMT, compared with a 0.27 rise in Johannesburg's Top-40 index of blue chips.
Analysts said the market had largely factored in the spike in earnings after guidance given earlier this month and saw the share drop as part of a larger sell-off of South African stocks.
"On balance, the results are acceptable, good ... they are embarking on some very ambitious projects," said Sasha Naryshkine, an analyst at Vestact.
The company is pursuing an aggressive growth strategy to benefit from higher prices and rising demand.
It is expanding its Khumani iron ore mine to produce an annual 16 million tonnes by the 2013 financial year, out of which 14 million would be destined for exports.
The company said its Konkola North copper project in Zambia, which the company is developing together with Brazil's Vale, was also on track, with estimated production of 45,000 tonnes of copper per year.
The copper concentrator will be commissioned in December 2012, with full production targeted for the 2015 financial year.
ARM said there was potential to increase output at the mine to an annual 100,000 tonnes.
"We plan to spend about a billion dollars with our partner Vale in Zambia over the next six or seven years," said Chairman Patrice Motsepe.
The expansion of its Nkomati nickel project was on track, with full production envisaged in the 2013 financial year.
PROFIT SURGE
ARM said first-half headline earnings per share, the main profit gauge in South Africa which excludes certain one-time items, rose to 734 cents compared with 214 cents.
The company said it had managed to reduce costs at some of its operations. Its ferrous unit, which includes iron ore, chrome and manganese, contributed most to the rise in earnings.
Chrome ore sales volumes from Assmang, in which ARM has a 50 percent stake, more than doubled, while production of copper and manganese rose 10 percent and 43 percent, respectively.
Sales for the six months rose to 6.7 billion rand from 4.2 billion in the comparable period. The positive impact from a rise in commodity prices was partially offset by the stronger rand.
Motsepe said Chief Executive Andre Wilkens would step down, but will continue within the company as an executive director. he did not say who would replace Wilkens.
Shares in the company are up 0.43 percent so far this year, in line with a 0.57 percent rise in Johannesburg's Top-40 index of blue-chips.
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